How to Handle Collection Agencies

Hopefully you have never dealt with a collection agency. If you have, then you know what a nightmare it is. It seems that some collection agencies will stop at nothing to cajole, harass, threaten or annoy the money out of you. Fortunately there are laws that protect consumers, and knowing these laws will help you know how to handle collection agencies.

Instructions

Difficulty: Moderate

1. Send everything in writing. Do not make any admissions; make payment arrangements or negotiations over the phone or in person. Putting everything in writing provides you with documentation that you may need later on if you decide to report the collection agency. Insist, in writing, that the collection agency only deal with you in writing as well.
   
   
2. Refuse to talk on the phone to collection agencies. They are required to notify you in writing if you owe money. They are also required to inform you of your right to dispute the debt. If they ask you to call in a letter or on an answering machine message, don't. Again, do everything in writing.
3. Avoid admitting the debt if you believe that you do not owe the money. When you contact the collection agency in writing, refer to the debt by listing the account number and not by referring to it as "my debt" or "my phone bill."
4. Contact the Attorney General in your state to find out what the statute of limitations is on your debt. Some debts have a certain time limit, after which the debt is no longer collectible. Make sure you know before you pay, because making a payment causes the statute of limitations to restart.
5. Know your rights. Collectors are not allowed to call people you know except to get an address and phone number, and they may not call you on Sundays, holidays or between eight a.m. in the morning and nine p.m. in the evening. They are also restricted from harassing you by calling all the time. See the Resources section for more information.
6. File a complaint with if you feel you are being treated unfairly. The Attorney General's office investigates collection agencies, and a complaint can also be filed with the Federal Trade Commission.
7. Negotiate with the collection agency. Some will allow you to make a payment plan or pay off just a percentage of your debt. Do this in writing. If you do make payments, make them by money order and keep all your receipts.

Tips & Warnings

• Send everything through certified mail. Get a return receipt so you can prove when and by whom it was received.
• You may write the collection agency and request that they not contact you any more. They will only be able to contact you to let you know that they are not pursuing your debt any more or that you are subject to legal action.
• Never send original copies of your receipts or other documentation. Keep the originals and make copies.